Understanding consumer behaviour in tanzania

Tanzania is a developing country that is portraying a steady and positive economic growth. The country is divided into 26 regions and has around 38.5 million people. Like any other developing country, Tanzania still faces a lot of challenges. To name a few, these include budget deficits, unemployment, inflation, poverty and power cuts. The Gross Domestic Product (GDP) of the country grows at a rate of 9% and poverty is around 48%. The leading sector is agriculture which employees around 80% and contributes around 52% to the GDP and the industrial sector comes next by 13%.

The Internet, sometimes called simply “the Net,” is a worldwide system of computer networks which users at any one computer can get information from any other computer (and sometimes talk directly to users at other computers).

A personal computer is any general purpose computer whose size and capabilities makes it useful for individual to operate directly by an end user with no intervening computer operation.

Digital media is a form of electronic media where data is stored in digital (as opposed to analog) form. It can refer to the technical aspect of storage and transmission (e.g. hard disk drives or computer networking) of information or to the “end product”, such as digital video, augmented reality or digital art.

The term broadband refers to a telecommunications signal of greater bandwidth, in some sense, than another standard or usual signal (and the broader the band, the greater the capacity for traffic).

A).

Market size can be analyzed on the basis of population size, availability of electricity, income size, technological awareness, education levels, changes in tastes and preferences and the economic trends.

Currently there is a growing market of internet, PC, digital media and broad band. Many people are now using internet in their homes, offices and teaching institutions. This is mainly due to the need of acquiring knowledge. World wide the computer usage rate at higher learning level, is now at 30% and growing rapidly. In Tanzania the number of internet service providers has increased over the years Eg, Cats Net, Raha.com, TTCL, and Seacom just to mention a few.

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Due to the high increase of computer usage, the market for personal computers has increased immensely in-turn increasing the need for use of internet. It is a normal scenario to find people using personal computers at the work place, in homes and in various learning institutions. This awareness of personal computers and internet in-return has increased the market for digital media.

A Market segment consists of a group of consumers who respond in a similar way to a given set of marketing efforts. In the internet market, for example, consumers who want commercial and fast internet services would make up one segment. Consumers who want domestic and cheap internet service make up another market segment.

The PC market in Tanzania is also segmented according to the nature of use of the tool. For example, a home user would prefer something more accommodating and practical for the home e.g. a desktop that blends in with the rest of the house where as a career person would prefer a mobile PC e.g. a laptop that they may use even when travelling.

The market for digital media and broad band are also segmented in a number of ways such as income, geographical location, age, gender, and use. Digital media such as CDs are mainly for high income earners and video tapes for low income earners. Flash drives are for domestic users and others for commercial users.

Generally, the market trend for all the above items is increasing due to the favorable awareness and growing need of use of information technology.

Video streaming is a new multimedia technology that allows video producers to share their work inexpensively with a worldwide audience. This service has not been around for a long time in Tanzania and to date, it is commonly used by TV, radio stations (media houses) and magazines through their websites where they play different news images

B).

Business firms have objectives that they look forward to achieving through their sales and profit maximization. In order for these to be achieved a great deal of competiveness will be imposed among firms. In the Tanzanian economy, there is competition in the market of internet service providers, PCs, digital media and broad band. The competition rotates around the marketing mix elements as below.

Product, the goods and services offered by the firm to the market. Here the competition is in terms of quality, variety, design, Features, brand name, packing, and services. Looking at internet service providers, for example, the competition is based in terms of speed, bundles and usage. For PC and digital media, the competition is based in terms of memory size, accessories (Bluetooth, Wi-Fi etc) and bran (Apple, Sony, HP etc)to mention a few.

Price, the amount of money customers have to pay to obtain the product. Here the competition is in terms of the price charged (list price, discounts, and allowances) and the pricing system (payment period and credit terms) used in the market. In Tanzania internet service provided has decreased to as low as 10,000/= shillings per month, there are also promotional prices provided for PCs and digital Media items

Place, these include company activities that communicate the merits of the product and persuade target customers to buy it. Here the competition is in terms of distribution channels, coverage, location, transport and logistics. In Tanzania for example, the location of the product is also responsible for the pattern of competition in the market. Internet outlets are located near those areas of high consumption such as city centers and education institutions where they can easily be accessed. This as well applies to the digital media out lets and PC plus broad band out lets.

Promotion refers to the activities that communicate the merits of the product and persuade target customers to buy it. Her firms are carrying out a lot of advertising, personal selling, and public relations for their products to gain competitive advantage over another firm’s product. Extensive promotional methods are used by firm’s as mean to stay relevant to consumers.

The Tanzanian market provides fixed media (TVs, multimedia, electronic billboards etc) located in places of high movement (bars, hotels, restaurants and educational institutions), which help to provide permanent services in those areas which creates an added value to the clients; Where as the mobile media (mobile phones, PDA’s etc) allows for events to take place in various locations as it can be moved from one area to another.

C).

Consumption patterns varies in the Tanzanian economy where by there are situations when consumption is high and when it’s low. The pattern of competition is related to the marketing mix element as illustrated below.

Bundling of services such as internet and digital media items has increased their demand. PC’s are also sold with additional items such as speakers, headphones and program CDs.

Prices are so competitive that they have contributed to increase in demand of the items in the market. The internet prices have gone down and the prices vary according to the speed, usage, bundles and durations. The use of PCs and digital media has also increased due to fall in the prices.

Place describes the location where the said products are readily available for the customers. The fact that many of these out-lets are located in area’s where there is a high customer ration it has contributed to an increase in demand of the products.

Product includes the various improvements which have made that contribute to an increase in the demand pattern. Internet speed has been improved, PC and digital media plus broad band has also been improved a lot. The products have also been varied in order to meet the needs of different customers

Promotion methods have been implemented in numerous ways, for example, the level of advertisement has increased which has helped in attracting more customers hence increase in the consumption pattern.

In summary the marketing mix parameters have contributed a lot towards increased demand patterns.

REF: http://searchwindevelopment.techtarget.com/definition/Internet 10:42AM Wednesday 20/04/2011

: http://en.wikipedia.org/wiki/Broadband , http://en.wikipedia.org/wiki/Personal_computer , http://en.wikipedia.org/wiki/Digital_media 10:49AM Wednesday 20/04/2011

: Principles of Marketing, Philip Kotler and Gary Armstrong, 11th Edition, pg 50-51

: http://www.videomaker.com/article/8553/ 1:48PM Wednesday 20/04/2011

Task 2 – 15 Marks

A).

The motivation for purchase or consumption for both the participants and receivers will include the following:

With this service, distance will no longer be a reason for not attending a far away event as it will be able to view the event from a far.

The high transport costs of movement is also a motivation for purchase of the service as there will not be any more need to incur high transport costs on movements towards attending distant events.

The disability issue is also solved by the service as its provision may not require any need for movements.

Lastly, another motivation for the purchase is to bring back the memory whereby people are able to see their friends and relatives who are distant and those who have not been able to see each other for a long period of time

The added value will involve all the additional features on the service more than those expected. Value added to both the participants and receivers will include the following:

Good customer care to the receivers and participants in the service

More satisfaction to the both participants and receivers as they will access all the information required.

The additional behavioral issue such as the possibility of editing allows the customers to delete any images not required.

The perceived benefits to both the participants and receivers of the service will include the following:

Stress concerning distance and cost of transport for the receivers will be solved by the service due to the fact that distant friends and relatives will be able to view the proceedings of the event as if they where physically present. The transport costs will be saved and no more worries of the need for movement to attend distant events such as weddings.

The participants will also be able to see their relatives that they had not seen for a long period of time

B).

There is difference in value between a person being present at an event and distance participation because being present at an event has a lot of added value and advantage compared to being distant, as seen in below.

Being present provides the opportunity to participate in the events activities physically which portray that you value the people concerned and your commitment to them

Being present allows you to be able to give advice when needed

Being present enables you to get all the information and happening first hand as you are physically present

The value of being present as oppose to distance participation can be seen in events such as funerals and weddings. In Tanzania, for example, being present at a funeral shows that you are concerned, moved and touched and was able to take the responsibility of being available.

In case of happy events such as weddings you are able to enjoy all the related entertainment events such as exchanging of vows, cutting the cake, dancing etc.

On the other hand distant participation has the following differences as compared to present participation.

One will not have an opportunity to participate directly in the activities of the event and therefore have less contribution.

It is very possible to miss some of the occurrences as all can’t easily be covered by the camera and in case of technological problems, there will be some interruptions

Demography is concerned with population characteristics such as age, gender, social class, education, occupation, family size, density and so on. The demographic participants in the event will depend on a number of factors which include time of the event, type of event etc.

Age divides population into baby boomers (people born during the baby boom following World War II until early 1960’s), Generation X (people born between 1965 and 1976) and Generation Y (children of baby boomers born between 1977 and 1994). In funerals, for example, the age group that normally attends is the baby boomers and Generation X.

Social class divides population according to the level of income, the higher income earners can attend all kinds of events as they can afford the transport costs but the poor may be limited by issues such as transport.

Gender looks at population in terms of males and female. Normally events are attended by all males and females but in some circumstance some are only attended by females for example bridal parties.

The demographics of participants create problems when two extremes of the factor are invited to the same event. At a wedding, for example, if the groom is British and the Bride is Tanzanian, extra preparations will have to be made to allow both parties to understand, enjoy and be able to participate fully.

Occasions where these services may be appropriate are those of happiness and sadness which include: weddings, funerals, birthdays etc. Allowing for the following:

Easy coverage and transmission of the recordings in terms of images and sounds.

Even communication between the coverage time and out put to the receivers.

Downloading and recording of the image for personal use.

REF: Principles of Marketing, Philip Kotler and Gary Armstrong, 11th Edition, pg 69-80

Task 3 – 15 Marks

A).

Advocacy is the act of supporting, recommending or pleading to some one to buy a good or service of a particular firm. Advocacy is important as it helps to present and express views effectively allowing a person to obtain independent advice and accurate information. Advocacy will help to change the attitude of many and hence enable to purchase the service so with advocacy more sales will be made

Direct consumer advertising involves advertising directly to the concerned consumer. This helps to attract more attention from those concerned for example advertising tally courses directly to the accountants. With direct advertisement the service will be advertised directly to those who may need the service for example giving out fliers to soon graduating students at the university gate. Direct consumer advertisement will help to capture more customers as it will be more effective by clearly addressing the concerned.

Any event has a number of tasks to be accomplished thus requiring a number of participants to organize the events. These participants have to work hand in hand with the event coverage team as well act as advocacy for the service.

B).

Globally the time zones differ among continents and countries in different geographical areas. For example, in one country it may be day time whereas in another country may be night. In some countries as people are preparing to go to work, others are planning to come back from work. The global time zone differences have an effect on cultures and the way people plan for their day to day activities. As regards to the services, there will be more need for planning if there is a difference in the time zone between the area of coverage and the recipient area. It is clear that during the day the quality of an image is far better than it is at night. The internet speed, for example, also differs at night as compared to the day; the internet speed is slower during the day due to many users and faster at night.

C).

A number of behavioral issues need to be considered in relation to this service and include the following:

Editing helps to produce the best quality by eliminating the unwanted materials. Thus the service should give greater consideration for use of this tool by the recipient to allow them to eliminate what ever they may not need.

Downloading and recording will enable recipients to download the images and sounds, eventually saving or transferring them to any digital media.

Communication should be high and barrier free to alert the recipient in case there is a network failure.

Different options of viewing should be an option enabled to every recipient to provide desired use out put. For example, it should include the possibility of viewing using mobile phones, computers, TV’s etc. This will give an opportunity for many to view the coverage of the event.

REF: IIT Student Manual, Topic 20-5

Task 4 – 20 Marks

A).

Market research is the process of collecting and analyzing data relating to the demand for a good or a service in a specific market. Any business would always want to find out how many people would want to buy the product that it is planning to offer for sale. Market research can be primary or secondary as illustrated below:

Primary research is data which is collected originally i.e. for the first time. It involves interviews, experiments, observations etc.

Secondary research involves data that was already collected for another purpose. Secondary sources include news papers, government publications, and internet etc

The following research methodologies might be most appropriate to test the above ideas:

Questionnaires involve setting structured questions for the public to answer. These questions cover type, quality, weakness, price and technological specifications required to use it.

Interviewing involves the firm’s representatives asking users and potential users for their opinions directly. It consists of set questions that are recorded when answered. The questions will evolves around problems of use of video recordings, prices, quality etc

Observation involves the firm’s representatives visiting different occasions to see how the video recordings are done, how many camera’s are used, duration etc

The advantage of using the above methods is that:

Information gathered will be detailed and qualitative

Information gathered will be a Customer opinion

The interviewer will explain any question that the interviewee doesn’t understand

B).

When making research it is difficult to collect data from all the people required due to constraints such as time, money etc thus there is a need for sampling. A sample is group to be asked out of the many but despite sampling, a large group is likely to give more meaningful results. There are different types of sampling which include random sampling, stratified sampling and quota sampling.

Many samples will consider a number of factors in order to get rid of sampling errors, these include:

Different income groups

Different levels of education

Rural and urban users

The total number of people in the entire sample will comprise of 300 people and 100 in each of the category of the sample. These will be asked questions or given questionnaires to answer. The following are kinds of questions they will be asked:

What types of occasions do you employ recording?

How long does it take to get the final copy CD or video cassette?

What are the prices charged and what are some of the factors considered in pricing?

How can you allocate where to get the services?

C).

In-depth research techniques involve techniques which are a great way to speak to customers to find out what they want exactly. This is very important as it possible to know what the exact required information is.

For example, Interviewing involves asking a number of questions to video recording customers and then noting down their responses. Considerable amount of time should be given to each respondent in order to clearly express their ideas and o allow for enough time to ask all the required questions in the clearest manner.

Focus groups involves identifying a specific group of people with potential information required, put in one place and discussing those areas of interest in your research.

The in depth research techniques will creates detailed information which may help to cover up gaps in the other information got from other sources

REF: IIT Student Manual, Consumer Behavior, Topic 4

Task 5 – 20 Marks

A).

According to my finding, the Tanzanian market is a viable market for this type of service. Viability of a market for a certain good or service depends on favorable market conditions towards the commodity. Market viability requires an analysis of factors that determine the potentiality of the market such as the competitors, affordability etc. In the Tanzanian market, for example, the factors that determine favorability of a market being viable include:

Competition where the service is still in the initial stages and many firms providing the service that does not reach consumer expectation.

Uniqueness of service the exclusive individuality of a service increases its chances of survival, recognition and demand in the market.

Price this is a major factor that determines the favorability of a product in the market.

The Tanzanian economy is in a transitional period driving from socialism to capitalism which opens more investment doors for the private investors and creates more freedom of choice by the consumers.

Internet availability and broad band service also make the market more viable due to a greater improvement and use of internet services in Tanzania which creates more demand for the service

B).

Competition is a norm in any market causing firms to fight for “being the best”, this in-turn benefits the customers in giving them room to evaluate what product caters to their needs. The following are the competitive benefits for purchasers and receivers of the service:

Lower prices attracts customers to the product increasing the firms market size

Quality of service to the customer must be improved to increase their satisfaction of the product

Variety of service will widen consumers choice i.e. length of recordings, image colour, image quality etc

Information conveyance to customers will allow them to make clearly understood choices. Thus every firm should do its best to up-date customers on any new developments.

Innovation and invention should be prompt among the organizations to allow better technology in video coverage, better branding, better customer care services etc

C).

CB blockers are common when introducing goods or services. They need to be dealt with effectively in order to pave way for a product in the market. This can be done in the following ways:

Carrying out advertisements and sales promotion through which the potential consumers will be informed about the benefits of the service and the advantages as compared to other services

With regards to limited capital soft loans can be sought in order to inject more capital to buy high quality goods

Carry out market research is inevitable in order to get all the relevant information about what the consumers want, the various market segments, etc

Use of personal sales representatives who would visit places of various events to explain to the potential customers about the benefits of the services and why it stands to be the best as compared to that of the competitors and therefore should go ahead and buy the service

D).

Pricing strategy. As a new service in the market I will adopt a number of marketing strategies which will vary from time to time depending on the situation as below:

Penetration pricing. since its will be the start I will set a low price just to attract customers and once I have gained the market share then the price will be increased

Price skimming. due to the uniqueness of my service as compared to those the competitors I would at a certain time .people will realize the high quality of the service and hence willing to pay

Product lining pricing. the service will be differentiated based a number of factors for example the time of the coverage, quality and so on and then set price according to the benefit expected

Promotional pricing could as well be adopted for example during graduating season a lower price could be charged for the service. this would be looked at as a congulgrately message but the sales will also increase

Event coverage strategies

In covering the event I will employ highly skilled personally in the field and also employ high quality facilities such as cameras in order to produce a good quality service. I will as well seek for advice with the clients on some matters related to coverage in order to give in their views I will as well be up dating them on the progress of the coverage

Benefit promotion

Benefit promotion strategies

Customers are so much concerned about the benefits provided by different sellers. As regards benefit promotion the following will be done:

Advertising. I will advertise using different media which will be aiming at informing and persuading customers to buy the service for example flyers could be give out on different occasions

Personal selling where by sales staff will approach and talk to prospective customers about services of the business

Sales promotion. this will require the business providing a number of offers such as occasional price reductions, small presents such as pens, openers and so on

Trade fair and exibhitions.the business can as well participate in trade fairs of video recordings